Becoming a Financial. Grown-up

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Crystal Lucas
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1 Directions: 1. Write down the amount of money you think you spend (or is spent on you) in a given month and categorize the spending. (ex. food, phone, clothes, etc.) This is your initial budget. Complete this step on 3/29 after the test. 2. Track your expenses. For the next 4-5 weeks, you will record everything you buy (or what s spent on you) and the cost, in addition to any income you receive. Completed budgets will be due May 4 th. ex: Date Expense Amount Category 4/7 McDonald s $5.00 food Uber $12.00 transportation Redbox $3.24 entertainment 3. Organize your spending into the following categories (it helps to do this when you are recording the expense): o Auto & Transport (includes public transportation) o Bills & Utilities (phone, internet, cable...) o Education (supplies, expenses) o Entertainment o Food & Dining o Gifts & Donations o Health & Fitness o Personal Care o Pets o Shopping (clothing, hobbies ) o Travel o Savings o Miscellaneous (the stuff that doesn t really fit into any of the above categories) ***If you do not have a job and/or are not responsible for paying specific individual bills you need to be sure to communicate regularly with whomever is paying for the items you consume.

2 4. Warning: This part requires communication with your parents. Divide all household expenses in the following manner: ***Please let your parents know that you will be needing the monthly totals of the categories below once you start tracking your expenses. Food 1/3 of total monthly household grocery bill (you will add this to any amount you may spend on food for yourself meals/snacks outside of home) Transportation if you own a car, you are responsible for the total amount of transportation expenses, if not use the following divisions: ½ of car payment, auto insurance, maintenance; 1/3 of gasoline Mortgage/Rent/Utilities ½ of total bill for family size <3; 1/3 of total bill for family sizes >3 Medical insurance 1/3 of total expense 5. Income should be organized by earned (income you worked for) and received (income given to you) 6. Label each expense as either a need or a want. 7. Define the following terms: 1. spending plan 2. net worth 3. fixed expenses 4. variable expenses 5. disposable income 6. discretionary income 7. assets 8. liabilities

3 To be completed on May 4 th : 8. Total amount of income for the month earned (if applicable) received 9. Total monthly grocery bill Student s share of the grocery bill 10. Total transportation expenses (as listed on sheet) Student s share of transportation expenses 11. Total mortgage/rent expenses Student s share of mortgage/rent 12. Total utilities Student s share of utilities 13. Total medical insurance/expenses Student s share of medical insurance 14. Total household expenses (student s portion only) 15. Total amount spent for the month 16. Net income 17. What is the difference between the estimated total of the budget you made at the beginning of the month and your actual spending for the month? 18. What was your largest expense category?

4 19. Total cost of needs category 20. Total cost of wants category 21. Assuming your monthly income was the same each month, how much income would you have for the entire year? 22. How much income would you have to make in a year to cover your current monthly expenses? 23. If you were able to take 5% of your total wants and put it aside for savings each month, how much money would you have? How much money would you have saved in a year? 5 years? /

5 Date Expense Amount Category

6 Date Expense Amount Category

7 Due May 4 th Questions: Tips to Manage Money Like a Millionaire 1. How does one grow rich? 2. What needs to be done with discretionary income? 3. What is the purpose of a spending plan? 4. Why are emergency funds necessary? 5. Why is net worth more important than income? 6. How much of your income should be saved with your first job? 7. What does pay yourself first mean?

Chapter 1: How to Make and Stick to a Budget

Chapter 1: How to Make and Stick to a Budget How to Make and Stick to a Budget What s the first thing you think of when you hear the word budget? If you re like most people, you think of saving money and